Singapore’s Deputy Prime Minister, Tao Chee Hean, made his pitch to Canberra yesterday: his government’s minority stake in the Singapore Exchange should not stop its $8.4 billion takeover of
ASX
Ltd.

Singapore’s 23.5 per cent non-voting holding in the exchange, which is administered by Temasek, the island state’s national investment agency, has become one of the stumbling blocks to closing the deal.

The takeover requires approval from Treasurer
Wayne Swan
and can be blocked by either house of the Australian Parliament, which can disallow changes required to enable a single shareholder to own more than 15 per cent of ASX Ltd.

Independent MPs introduced a motion last night to block the deal between the Singapore Exchange and the Australian Securities Exchange.

Temasek issued a statement to the Australian media in early November denying it took orders from the Singapore government, in an effort to soothe concerns over its relationship with the administration. Mr Teo said the Singapore government’s investment had arisen out of a demutualisation of the SGX and as it did not include voting rights, the issue of control by the government did not arise.

“That holding is held entirely for the benefit of the financial industry development fund,’’ Mr Teo who is also Singapore’s Defence Minister, told a press conference in Canberra yesterday after meeting his Australian counterpart,
Stephen Smith
.

“The holding is not voted, so there is no issue of control by the Singapore government."

Mr Teo said regulatory processes should be allowed to take their course.

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“Perhaps we would take one step back . . .I think the whole Asia-Pacific region is becoming more integrated,’’ Mr Teo said.

“Whatever opportunities are there should be explored."

The Singapore Exchange offer is the fourth largest on record for a securities exchange and the first attempt to merge two major bourses in the Asia-Pacific region.

Outspoken Queensland independent MP
Bob Katter
introduced the motion into the House of Representatives to oppose any sale of the Australian Securities Exchange that would provide majority foreign ownership.

The motion, which is seconded by independent MP
Tony Windsor
, notes that: “Such a sale would not merely involve the ASX as an asset but may hand over to a foreign corporation the regulatory function inherent in a stock exchange."

While Mr Katter has the support of Greens MP
Adam Bandt
, the Liberal Party is taking a more cautious approach and does not want to judge the deal without more information. Shadow treasurer
Joe Hockey
has already had one meeting with ASX Ltd chairman
David Gonski
and chief executive
Robert Elstone
, and has asked for another briefing.

The opposition appears to want to keep political pressure on the government over the issue for as long as possible. MPs, especially in regional electorates, reported rising concern about foreign investment.

Mr Katter said the pro-market stance of Western countries in relation to foreign investment was failing against countries such as Singapore and China.

“Rampant marketism is failing miserably against the state capitalism of China and Singapore, where interventionism backed by state sovereign wealth funds allows them to murder our industries . . . they are undermining the economies of Western nations," he said in an interview.